Daqin Railway (601006 CH): Hold: Back in the slow lane

Research evidence excerpt

Daqin Railway (601006 CH): Hold: Back in the slow lane

ng c7% y-o-y in April-May, according to the General Administration of Dividend yield (%) 4.6 4.2 4.3 4.2

Customs; 2) restocking demand for thermal coal due to the coal price rally after the EV/EBITDA (x) 2.9 2.6 2.2 2.0

Shanxi mining accident; and 3) consumption shifts from oil to coal in the chemical ROE (%) 3.7 4.4 4.4 4.2

industry, given the favourable price gap. However, this momentum appears to have

weakened entering 3Q26, with Daqin Line’s freight volume declining 3% y-o-y on 1-6 July. 52-WEEK PRICE (CNY)

We expect 3Q26 volume to stay pressured, considering: 1) restricted mining, which 7.10

triggered reduced coal output y-o-y in Shanxi after the mining accident, is likely to persist

for a period; 2) rising hydropower output following the onset of the rainy season; 3) 5.70

elevated coal inventories, with coal stocks at Bohai Rim ports in early July tracking c5% 4.30

higher y-o-y; and 4) higher coal imports, as import coal’s price advantage has surged 07/25 01/26 07/26

since late June alongside supply conditions easing. From a longer perspective, we remain Target price: 5.10 High: 6.78 Low: 4.60 Current: 4.79

cautious on the freight volume of Daqin Line as Shanxi’s coal production is likely to peak.

Source: LSEG IBES, HSBC Qianhai Securities estimates

Dividend yield remains a valuation anchor, but profitability upside could be

limited. We expect the freight rate to recover moderately in 2026e, driven by David Wu* (Reg. No. S1700518110001)

narrowing freight rate discounts since May (as per Shanxi Economic Daily, 23 May), Head, A-share Transportation & Logistics Research

against the backdrop of improving coal freight demand and tight rail capacity. As HSBC Qianhai Securities Limited